Geoffrey Smith 

Investing.com — The dollar was consolidating at lower levels in early trade in Europe on Thursday, after the revival of some concerns over China’s real estate crisis interrupted the momentum of higher-yielding currencies.

China Evergrande shares fell as trading resumed after nearly three weeks of a halt. The embattled developer had to cancel a planned asset disposition that would have been beneficial for its short-term obligations. The company will likely default on Friday as the grace period for one of its dollars bonds ends.

At 3AM ET (0700 GMT), The, which monitors the greenback in relation to a basket advanced market economies, had risen 0.1% to 93.62. However, it was still less than half of a point off the beginning of the week.

The dollar’s biggest gains were against commodity currencies, as the Evergrande news cast fresh doubt on the demand trajectory for iron ore, and oil from a sector that is a big contributor to Chinese GDP.

The yuan, however, remained stable, mainly because of confidence in Beijing’s assurances that it can stop a systemic crisis. Dollar rose 0.1% to 6.4011 Yuan.

The dollar was stable against European currencies at $1.1643, and 0.2% lower against the pound at £1.3801, following data that showed a dramatic rise in U.K. government debt in September.  

The euro fared better against emerging European currencies, rising 0.3% against the zloty and 0.4% against the Hungarian forint ahead of a summit meeting that is likely to be overshadowed by the EU’s dispute with Poland over the rule of law.

Figures showed the U.K.’s vulnerability to rising interest rates. Market participants anticipate higher rates before the year ends. The U.K. Treasury will have less support for the economy if the debt servicing bill is higher.

On Thursday, the U.S. government will provide weekly unemployment data. From a low of 293,000 in the week prior, analysts expect that initial claims for unemployment will rise to 300,000.

There is little else of market-moving data due, although the Central Bank of Turkey’s meeting will be in the spotlight after the recent upheaval at the institution. After President Recep Tayyip Erdan fired all but one of the policy-makers who tried to stop an inflationary course, the lira plunged to new lows.